Using Financial Analysis as a Management Tool:an Empirical Study of Bulgarian Firms

This article aims at studying financial analysis as a key management tool and how it is used in the valuation of business performance. For this objective, the financial statements and financial reporting published by the firms on their websites were reviewed for information and data. Publications from the trade register and the Bulgarian stock exchange also served as sources of data for this article. Four main groups of financial analysis were provided: comparative, common-size, trend and ratios analyses. The study covers different periods, based on the availability of reliable information. For some firms the analysis was prepared on a quarterly basis, in order to highlight the performance valuation based on a short time period. Some of the firms are listed on Bulgarian stock exchange while others were not. Based on the official Bulgarian classification, some of the firms are very large while others are small. The firms operate in different industries, such as telecommunication, chemicals, tourism and manufacture. The variety of the business types leads to the conclusion, that whatever the size or environment, financial analysis is an important managerial tool, which could facilitate the understanding of the financial state of Bulgarian firms. As a financial management method, using financial analysis might be of help to shareholders, stakeholders and potential investors assessing the performance of Bulgarian firms and in making strategic and operational decisions